2006 California Tax Rates and Exemptions

The rate of inflation in California, for the period from
July 1, 2005 through June 30, 2006, was 4.8%. The 2006 personal income
tax brackets are indexed by this amount.

Corporate tax rates

Entity type

Tax rate

Corporations other than banks and financials

8.84%

Banks and financials

10.84%

AMT rate

6.65%

S corporation rate

1.5%

S corporation bank and financial rate

3.5%

Individual tax rates

The maximum rate for individuals is 9.3%

The AMT rate for individuals is 7%

Exemption credits

Filing Status/Qualification

Exemption amount

Married/RDP filing jointly and qualifying widow(er)

$182

Single, married/RDP filing separately, and head of household

$91

Dependent

$285

Blind

$91

Age 65 or older

$91

Phaseout of exemption credits

Higher-income taxpayers' exemption credits are reduced
as follows:

Filing status

Reduce each credit by:

For each:

Federal AGI exceeds:

Single

$6

$2,500

$150,743

Married/RDP filing separately

$6

$1,250

$150,743

Head of household

$6

$2,500

$226,119

Married/RDP filing jointly

$12

$2,500

$301,491

Qualifying widow(er)

$12

$2,500

$301,491

When applying the phaseout amount, apply the $6/$12 amount
to each exemption credit, but do not reduce the credit below zero. If
a personal exemption credit is less than the phaseout amount, do not apply
the excess against a dependent exemption credit.

Standard deductions

The standard deduction amounts for:

Filing status

Deduction amount

Single and married/RDP filing separately

$3,410

Married/RDP filing jointly, head of household and qualifying widow(er)

$6,820

The minimum standard deduction for dependents

$850

Reduction in itemized deductions

Itemized deductions must be reduced by the lesser of
6% of the excess of the taxpayer's federal AGI over the threshold amount
or 80% of the amount of itemized deductions otherwise allowed for the
taxable year.

Filing status

AGI threshold

Single and married/RDP filing separately

$150,743

Head of household

$226,119

Married/RDP filing jointly and qualifying widow(er)

$301,491

Nonrefundable Renter's credit

This nonrefundable, non-carryover credit for renters
is available for:

Single and married/RDP filing separately with a California AGI of $32,272 or less.

The credit is $60.

Married/RDP filing jointly, head of household, and qualifying widow(er) with a California AGI of $64,544 or less.

The credit is $120.

Miscellaneous credits

Qualified senior head of household credit

2% of California taxable income

Maximum California AGI of $58,963

Maximum credit of $1,111

Joint custody head of household credit and dependent parent credit
are each:

30% of net tax

Maximum credit of $363

AMT exemption

Filing status

Amount

Married/RDP filing jointly and qualifying widow(er)

$73,916

Single and head of household

$55,437

Married/RDP filing separately, estates, and trusts

$36,956

AMT exemption phaseout

Filing status

Amount

Married/RDP filing jointly and qualifying widow(er)

$277,183

Single and head of household

$207,888

Married/RDP filing separately, estates, and trusts

$138,591

FTB cost recovery fees

Fee type

Fee

Bank and corporation filing enforcement fee

$202

Bank and corporation collection fee

$168

Personal income tax filing enforcement fee

$125

Personal income tax collection fee

$126

The personal income tax fees apply to individuals and partnerships,
as well as limited liability companies that are classified as partnerships. The
bank and corporation fees apply to banks and corporations, as well as limited liability
companies that are classified as corporations. Interest does not accrue
on these cost recovery fees.